Acacia Communications Bolts, Giving Silent Tech IPO Market A Jolt
The tech IPO market remains in the doldrums, but it got a spark with Acacia Communications ( ACIA ), which turned in a strong debut on its first day of trading Friday. For its initial public offering, Acacia priced 4.5 million shares at $23 a share, the high end of its estimated range, raising $104 million. In afternoon trading in the stock market today , Acacia stock was above 31, up 35%, on volume of more than 3 million shares. The company makes chips that boost the speed and performance of optical communications networks used by cloud infrastructure operators and other content service providers. Its products include low-power digital signal processors that are application specific. It also makes silicon photonic chips that help facilitate data speeds of up to 400 gigabits per second, for use in data centers. It is also developing optical interconnect modules that will enable transmission speeds of 1,000 gbps and more. “We believe we are leading a disruption that is analogous to the computing industry’s integration of multiple functions into a microprocessor,” the company said in its IPO prospectus . The Maynard, Mass.-based company has grown rapidly. Revenue rose 64% in 2015, to $239 million. It reported 2015 net income of $40.5 million, up from $13.5 million in 2014. First-quarter revenue rose 78% to $47.2 million, with net income of $14.6 million. Acacia has about 25 customers, of which the top five account for about 83% of revenue. Its largest customers are ADVA Optical Networking North America, ZTE Kangxun Telecom, Coriant, and Alcatel-Lucent, it says in its IPO prospectus. Competitors include Cisco Systems ( CSCO ), Broadcom ( AVGO ), Finisar ( FNSR ) and Ciena ( CIEN ).